Sirius XM To Offer $250 Million Senior Secured Notes
Sirius XM Radio (SIRI) has announced their intention to offer $250 million in Senior Secured Notes due 2015. The purpose of the financing is to repay some of the debt held by Liberty Media at a higher interest rate. This event will push out some debt, albeit at a more manageable rate. It would appear that this move will help cash flow, and remove debt concerns in the near term.
The credit market has seen a new spark lately, as it appears that money is starting to loosen up. Last week Sprint was able to obtain financing in a major deal, and they are not alone. Just months after financing seemed to be at a standstill for nearly everyone, companies are suddenly able to make moves similar to the move made by Sirius with this announcement.
Liberty still holds some Sirius debt, but this move will erase a 15% rate on about $250 million that Sirius XM borrowed to stave off a possible bankruptcy. Liberty had stated about a week ago that they anticipated that Sirius XM would be refinancing some debt, and with this announcement, that speculation has been confirmed. In Sirius XM’s bond offering last month, Liberty bought $100 million worth. Those bonds will not be what is refinanced in this latest offering, as they already have a much friendlier rate.
Once complete, Sirius XM will have pushed much of their debt out to 2013 and beyond. This will give the company stability as they approach positive full year EBITA, and then profits.
Position – Long Sirius XM Radio – No Position Liberty
Any guess on what this will cost them in terms of EBITDA for Q3 and what this will save them in interest payments?
These last several debt moves are huge for Sirius. They have all the pieces in place to get to assured survival. If they are a growth company they have 3 years to add up to 3 million new customers which is an additional 300 million or so in free cash flow. If they have peaked subs wise they have 2 years until they can raise prices. You have to give Malone credit he hit a homerun.
No matter how you slice it, its still a LOAN and reshuffling of debt which is how we got into this mess in the first place.
Yep, give Malone the credit he is due but give ‘ol Mel even more credit…He is the MASTER of the shell game. One day it will catch up to that shylock.
Mel sez: “Just gimme a little more time and more money, I swear I’ll pay you back!!
Time is running out for Mel and his minions, the clock is ticking…………
Yeah, he’s gonna get some time alright
Look we saw a financial meltdown. If the question is why take any debt on at all thats another discussion. They needed talent and overpaid for it before current management came on. They needed time they have it…next 2 years will tell the tale. I think they will make it.
I’m afraid I have to disagree. Word of mouth is that SatRad (since it’s now SiriusFM or nothing since there is no other direct competitor) ain’t what it used to be and the bloom is off the rose.
SatRad has had 8 years to establish itself. I used to be one of SatRad’s biggest cheerleaders but that was then & this is now……..
Understand..I would sell then. I think its worth a look at .50 cents.
Recondo72,
You are right a loan is a loan but it will be under better terms- no matter how you slice this will yield to the bottomline and improve cash flow-
Mel had to do what he had to do. Things are changing and siri will make it.
I think you hit the nail on the head.
Mel is a professional LIAR.
In any event, it will be fun to watch the profit taking again tomorrow and see SIRI back under 50 cents.
Didn’t you say about the same thing a month or two ago and that SIRI was headed for .25? LOL
No Douchebag, I said 35 cents.
For the record, I have ACCURATELY called all the profit taking on SIRI.
Sirius-XM is FAR from out of the woods and will NOT turn a profit any time soon.
Until Sirius-XM is actually a profit making business, you should really STFU! 😛
Did you used to work for XM and get fired by Mel Boo Boo? I can’t understand your hatred for the guy that’s slowly but surely bringing this company back from the edge of the abyss. Your view is always negative on XM so why would you even bother to post here? We got it….you hate Mel and XM is doomed. Great…thanks for letting us all know. Bye bye now…
johnnyirish is reporting S&P credit rating lifted today to B-
here’s the link:
thank you Irish
sorry . . bad link. here’s the text:
Posted: August 13, 2009 at 12:48 pm
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Sirius XM Radio Inc. (NASDAQ: SIRI) has caught a debt upgrade from Standard & Poor’s. The cited reasons were that the liquidity position has improved after debt refinancings, and also that its EBITDA is improving.
Based on the new issue of $250 million of senior secured notes, S&P has raised its corporate credit rating on the company to ‘B-’ from ‘CCC+’ today. It was given a recovery rating of ‘1? and its outlook is stable. Among other positive mentions were manageable near-term debt maturities, likely operating performance improvements, and cost savings.
S&P revised the recovery rating on Sirius XM’s senior unsecured and subordinated debt to ‘5?, indicating a modest expectation of 10% to 30% for a debtholder recovery in the event of a payment default. The issue-level rating was raised one notch on this debt to ‘CCC+’ from ‘CCC-’ over an increased estimate of enterprise value.
S&P assigned the proposed $250 million senior secured notes due 2015 a rating of ‘B+’ and assigned the notes a recovery rating of ‘1? over very high chances of 90% to 100% recovery for noteholders in the event of a payment default.
That’s great because I remember when SIRI had a credit rating of ‘F’ 4 or 5 years ago, and the stock price was much higher then.
Sir/Madam:
The last paragraph you posted says it all:
“90% – 100% recovery for noteholders in the event of a payment default”
That dear sir/madam is an acknowledgement from S&P that the probability of Mel defaulting on payment is a DISTINCT possibility!! Thus the entities that are the lienholders get most of their money back if/when Mel/SiriusFM f**ks up.
Alice in Wonderland fer sure………….
Recondo72 = BahBah Booey
SiriusXM will eventually be the king of vehicle entertainment. Cars, trucks, boats, airplanes, commercial, residental, you name it.AMFM gets so boring it is painful to the ears and IPODS gets boring as well. Also, who wants to mess with gadgets when driving.Dr iving is already a pain. SiriusXM makes it so simple. The growth potential of this company is incredible. In 5 years every new car will have SATRAD factory installed and offering a paid for no advertising plan or a free plan that will be way better than AMFM.
I haven’t been following the news lately, but wasn’t there a clause in the Liberty Media deal which allowed Sirius to back out of the deal if Sirius was able to repay the loan in a certain amount of time? Or is the deal done and Mel actually gave away 40% of the company just for a loan that Sirius has to repay with interest?
Can only refinance cheaper as they did. The 40% is a done deal.
If this economy can turn positive in the next 2 years Sirius Xm will be one of THE first companies to profit big time from a turn around. It’s more of a bet on the economy than anything else. If you believe the economy will turn around in the next 24 months jump on a take a ride into space on one of the Sats. If u feel doom and gloom will stay then cash out. It’s that simple!
What color is the sky in your world.
All you cheerleaders have been predicting HUGE improvements and movements from Sirius-XM that never seem to actually occur.
Keep Dreaming! 😛
Your’re’r areyour’re still looking for my “pom pom” routine aren’t arenot you Bah? I know, your’reyouryou’re holding out for that one big cheer I’m going to give you. Ok. We’llwewill csee it someday.
Hey Blah blah, whos your broker that lets you short stocks under $2? And where they hell did they find shares? Or are you naked shorting illegally through him? LOL
Ever broker and there mother wanted shares of SiriusXM to short at $3, and $2.50 area. But you got them huh. Ok dude.
Hey relmor2003,
I have one simple question.
When will Sirius-XM turn a profit?
The answer is never.
All your BS wishful thinking will never change that.
Sirius-XM is an EXTREMELY poorly managed company that cares not for its customers of shareholders.
The quality of the Sirius-XM programming is no better than what is on Terrestrial radio at this point.
The only difference is the lack of commercials on some channels.
The fact is there isn’t one single compelling reason for anyone to purchase Sirius-XM.
Mel Karamzin took a company on the cutting edge and turned it into pure crap.
If its Q3 or Q4 will you kiss my ass?
and mine & some others !
He’ll be spreading Mrs. Butterworths all over you nuts as well on this one.
Bashers are a dime a dozen. You are as insignificant as the rest. Yours and you’res truly Socal.
Hey, Im pretty confident. Im putting my ass on the line, literally!!! LOL
Not one of you retards has been correct on where this stock was going before.
We’re all supposed to believe you now?
You retards were all predicting HUGE upward moves as Mel Karmazin was driving SIRI into the ground and all the way down to 5 cents per share!
FROTFLMAO! 😛
You want me Bah bah. I know you do. Rah Rah!!
So in your mind going from $.06 to $.56 in about 3 months is not huge? Glad you’re not my stock broker. Forward progress is all we’ve seen since early this year. It’s far more believable looking at all the information to see this company is rebounding than dying. If analyzing the facts makes us all cheerleader then rah rah rah.
Nice straw man.
Try actually reading and comprehending.
I made no comment on the current PPS since the bottom of 5 cents.
I said all you retards were all predicting HUGE upward moves as Mel Karmazin was driving SIRI into the ground and all the way down to 5 cents per share.
I also noticed you never bothered to reply to Tyler’s last response on the forums boo boo. Couldn’t come up with any supporting figures? 🙂
SIRI Down 2-1/2 cents today.
Geez, what could possibly be stopping such a fine,well managed company from increasing its PPS today? 😛
Boo Boo is a tool, & needs to go to a site that wants his input, like nambla. Absolute retard.
Krypto1, please go back to reading comic books in your mother’s basement.
You clearly don’t have the intellectual capacity to deal with contrary opinions.
boo boo google urban dictionary and search for the term “troll”. it will be an enlightening experience for you. i think there’s a picture of you next to the definition.
tyler and the rest of us are still awaiting your facts and figures to support your feeble arguments against sirius by the way.
take a break from the useless name calling and enlighten us all with your brilliant analysis of this doomed company by supporting what you say with some serious, in depth number crunching. tyler has left the door wide open for you. let’s hear it….
The entire market was down yesterday boo boo. I guess all the companies in the U.S. are mis-managed if we follow your wisdom. Or at least they were yesterday. SIRI back up .02 today. They must have canned Mel.
Bah Bah. Since your an East Coast resident. I’m willing to wear my New York Giants cheer gear, when you are ready. Oh the anxiety is killing me. Good night Bah Bah.